Home Depot has this really cool device I want to steal from them for this. It's a 3" wide blade type thing that gets red hot. You put the rope, or webing, over it and it cuts and seals at the same time. Really cool, but they don't want to sell it and it's bolted to an I-beam.

You can use a knife and some source of fire, but it works better and it does not mess up webbing if you go to your local climbing store. Usually they will have a rope cutter which works so much better.